Saturday, July 28, 2007

Teamsters Set Sights on Representing UPS Freight Employees

Proven Record of Collective Bargaining, Negotiating

GAFFNEY, S.C., July 27 /PRNewswire-USNewswire/ -- UPS Freight employees
in South Carolina need workplace representation by a strong and
track-proven labor union. The Teamsters Union fits the bill and has a
strategy to represent them.

"We know that a fly-by-night group, APWA, is trying to organize the
employees of UPS Freight, but they are only after one thing, employees'
money," said L.D. Fletcher, President of Teamsters Local 509. "APWA doesn't
even have records on file with the Department of Labor. We encourage
workers at UPS Freight to hold on for representation by the Teamsters, the
premier representative of UPS parcel and small package employees in North

The Teamsters represent 200,000 UPS workers across the country and are
currently negotiating a contract for the UPS Freight workers in
Indianapolis that will be a model for the rest of the country.

"We are confident that UPS Freight employees will not be misled by a
group supported by the Right To Work Committee and represented by a
union-busting lawyer. This group has no experienced leadership, no staff
support, no pension plan, no health plan, no collective-bargaining
experience, but makes unlimited, empty promises," said Ken Hall, Director
of the Teamsters Parcel and Small Package Trade Division.

"UPS Freight employees may be frustrated by their long effort to join a
union, but that should not cause them to prematurely select a group that
will not produce on its promises," Hall said.

Teamsters already represent more than 4,000 workers in the state of
South Carolina, including employees of UPS, Yellow, USF Holland, ABF and
Roadway Freight, plus Crown Cork and Seal and twenty other miscellaneous

YRC chief discusses freight downturn

Freight slowdown

YRC Worldwide Inc. said the downturn in freight volumes afflicting it and the entire transportation sector does not appear to be ending any time soon.

“It looks like more of the same,” said YRC’s chairman and chief executive officer, Bill Zollars. “We don’t see it getting much better, and we don’t see it getting much worse.”

Zollars and YRC executives discussed the Overland Park transportation giant’s second-quarter financial results Friday morning with investment analysts. On Thursday, YRC reported a decline in earnings and revenues, posting net income of $55.37 million on $2.49 billion in revenues.

Zollars said the company has responded to the downturn by cutting costs. At YRC National Transportation, made up of the big carriers Yellow Transportation and Roadway Express, about 2,800 hourly workers are on furlough.

Thursday, July 26, 2007

YRC Worldwide Announces 2nd Quarter Earnings

YRC Worldwide Inc. YRCW today announced reported diluted earnings per share ("EPS") for the second quarter 2007 of $0.95 compared to $1.58 in the second quarter last year. Adjusted diluted EPS was $0.91, compared to $1.62 for the second quarter 2006. Second quarter 2007 reported EPS includes a $0.07 benefit from a reduction in the effective tax rate. Adjusted EPS excludes a net gain of $0.04 from the following: property disposals, reorganization charges related to YRC Logistics and settlement of certain pre-acquisition USF obligations. The company does not consider these gains and charges part of core operations and excludes them when evaluating ongoing performance.

"Our results continue to be impacted by a weak domestic shipping market resulting in a difficult operating environment," stated Bill Zollars, Chairman, President and CEO of YRC Worldwide. "National Transportation results compare favorably to overall industry performance even as we continue to face an economic headwind."

YRC Worldwide reported the following consolidated results for the second quarter 2007:

-- Quarterly operating revenue of $2.5 billion compared to second quarter last year of $2.6 billion.

-- Adjusted operating income of $105 million compared to second quarter 2006 adjusted operating income of $177 million. Adjustments in the second quarter 2007 exclude a net gain from the following: property disposals, reorganization charges related to YRC Logistics and settlement of certain pre-acquisition USF obligations. Reported operating income was $108 million compared to reported operating income of $172 million in 2006.

-- The tax rate declined from 39.0% in the first quarter of 2007 to 34.6% in the second quarter primarily due to the newly available propane gas tax credit.

-- National Transportation adjusted operating ratio was 94.9%.

Statistical information is available on the company's website at under Investors, Earnings Releases & Operating Statistics.


"The transportation industry continues to experience soft volumes year over year," Zollars stated, "and most economists have pushed out economic strengthening until late in the year. The slower economic conditions will continue to impact the company as we move through 2007."

The unpredictability of the economy directly impacts the company's ability to provide an accurate 2007 forecast. Therefore, for the balance of this year the company will not provide annual EPS guidance.

However, we do have the following expectations for the full year 2007:

-- Interest expense of approximately $90 million.

-- Consolidated income tax rate of 36.9% for the second half of 2007.

-- Diluted average shares of approximately 58 million assuming an average year-to-date, through June 30, 2007, stock price of $41.15 per share.

-- 2007 gross capital expenditures in the range of $375 to $400 million and disposals of approximately $50 million.

-- Free cash flow in excess of $200 million before funding of our single employer pension deficit and settlement of certain pre-acquisition USF multi-employer pension withdrawal obligations.

Hoffa Says U.S.-China Trade Policy Undercuts Middle Class, National Security

Teamsters General President Jim Hoffa told a Senate panel today that U.S. trade policy is strangling democracy in China, national security in the United States and the middle class in both countries.

Hoffa testified before the Senate Subcommittee on Interstate Commerce, Trade and Tourism on "Trade Relations with China." Workers' safety and prosperity in the United States is linked to labor standards in China, he said.

"I like the Chinese and wish them well, but I love and fight for U.S. workers," Hoffa said. "It is time that this administration and all of us in this room take control of our globalization policies to ensure that our workers benefit and our families are kept safe."

Hoffa outlined a series of steps for Congress and future administrations to take to help protect the middle class in the United States and to enhance national security. Those include ending Chinese currency manipulation, increasing inspection of food imports, eliminating tax breaks for corporations that move jobs to China and raising labor standards in that country.

In May, Hoffa led a delegation of Change to Win unions on a fact-finding mission to Beijing, Shanghai and Hong Kong, ending a decades-long freeze on relations with China's only union. Hoffa's visit convinced him that China currently is not building a middle class capable of sustaining economic growth through a domestic consumer market.

"China is setting the global norm for working standards around the world," Hoffa said. "Those standards are much too low workers in the U.S. and workers in China. We plan to work with all the worker advocates we met to improve those standards."

U.S. corporations doing business in China have used their influence to oppose modest changes in reforms to labor law, changes that would empower workers and promote democracy, Hoffa said.

Hoffa noted that the U.S. lost 3 million manufacturing jobs since 2000 as a result of our trade policies, especially with China.

"Our manufacturing loss is a matter of national security," he said. "We are losing our capability to supply our military troops with uniforms, ammunition and other essential items."

"The public has lost confidence in our trade policies," Hoffa continued. "U.S. trade policies lately seem to be more about the number of trade agreements signed rather than the results they achieve."

Hoffa urged Congress and the Bush administration to take a number of steps to improve U.S. trade policy toward China, including:

* To deal with the undervalued yuan, which is hurting U.S. workers and manufacturers. Congress should pass the Stabenow-Bunning-Bayh-Snowe bill, S.796, and the House counterpart, Ryan-Hunter, H.R. 782.

* To keep dangerous Chinese products from entering the U.S., the administration should increase testing and inspection of food imports, while Congress should pass legislation by Sens. Sherrod Brown, D-Ohio, and Dick Durbin, D-Ill., to give the FDA the authority to approve countries eligible to import into the U.S.

* To leverage the issue of labor standards in China, Congress should pass S.367, the Decent Working Conditions and Fair Competition Act, introduced by Sen. Byron Dorgan, D-N.D. Future administrations should accept a Section 301 petition on labor rights in China.

* To prevent U.S. corporations from moving U.S. companies and jobs to China, Congress should eliminate tax preferences for companies to move offshore.

* To force China to open its markets and end its practice of dumping, future administrations should use existing trade rules aggressively and apply the remedies.

Wednesday, July 25, 2007

Perot Systems Inks Applications Deal with YRC Worldwide

Perot Systems Corporation today announced that Fortune 500 company, YRC Worldwide has selected Perot Systems to support development of future business systems for the company's multiple brands. Terms of the multi-year consulting and applications services agreement were not disclosed.

The business relationship includes supporting and modernizing current applications across divisions of YRC Worldwide. It also includes migrating to standard architecture and technology for applications across all functional domains. YRC Worldwide and its business units would draw upon the expertise and wide resource base of Perot Systems for successfully accomplishing this transformation.

"In order to support global growth of our company, we need to simplify and standardize our application portfolio and deliver an exceptional customer experience across all our brands," said YRC Worldwide CIO Michael Rapken. "As we move forward with our growth initiatives, Perot Systems will play an integral role in helping us achieve our business goals."

"By helping to simplify and standardize the application portfolio and infrastructure, we will help YRC Worldwide achieve greater flexibility to support the changes they anticipate in their business," said David Miller, vice president for Perot Systems Consulting and Applications Services in North America.

YRC Worldwide plans to benefit from Perot Systems' domain expertise coupled with its reputation for successfully blending onshore and offshore services. As part of this effort, Perot Systems will support YRC Worldwide from multiple service delivery centers throughout the U.S. and India.

YRC Worldwide adds to Perot Systems' roster of travel, transportation & logistics clients, and represents an important demonstration of Perot Systems' diversified service offerings to the industry.

Court tosses hours policy for truckers

A federal appeals court on Tuesday struck down a Bush administration rule that loosened restrictions on the work hours of truck drivers after concluding that officials had failed to adequately justify the changes.

In a unanimous decision, a three-judge panel of the U.S. Court of Appeals for the District of Columbia said that the federal agency that oversees the truck industry did not provide enough evidence to demonstrate the safety of its 2005 decision to increase the maximum driving hours of truck drivers. The hours of service were increased to 77 from 60 over seven consecutive days, and to 88 hours from 70 over eight days.

The court found that the agency, the Federal Motor Carrier Safety Administration, a unit of the Department of Transportation, had ignored the results of a database it commissioned of more than 50,000 truck accidents from 1991 to 2002. Using the data, the study extrapolated that the risk of fatigue-related accidents would be substantially higher in the extra hours of service allowed by the new rules.

The agency "failed to provide an adequate explanation for its decision to adopt the 11-hour daily driving limit," the court said.

The rules had been adopted after heavy lobbying by politically connected leaders of the truck industry. The changes were part of a strategy by the Bush administration to reduce regulations on businesses.

Safety experts and insurance analysts had challenged the changes. They said longer driving hours have contributed to a high number of truck accidents. About 100 people die each week in truck-related accidents, making trucking America's most treacherous industry as measured by overall deaths and injuries.

Supporters of the loosened standards say they have made it faster and cheaper to move goods across the country. They say that the changes promoted safety and that shorter hours would force more drivers with little experience behind the wheel. And they note that the fatality rate has continued a long decline.

Still, the fatality rate for truck-related accidents remains nearly double that for accidents involving only cars. And the Bush administration has repeatedly missed its own targets for reducing the number of fatalities from truck accidents.

The decision on Tuesday came in a case filed by Public Citizen, a consumer advocacy group. Safety groups hailed the ruling and said the court had confirmed their view that the agency had failed to adequately justify relaxing the rules.

The agency would not say whether it would appeal the decision or seek a stay of the court's order, which is set to go into effect in September.

The American Trucking Associations, which defended the changes to the rules in the proceeding, said they would ask the court to stay its ruling to give the agency time to provide a better justification of the changes.

Teamsters Praise House for Blocking Cross-Border Trucking Program

The Teamsters Union strongly endorses the House of Representatives’ move today to block the Bush administration’s cross-border trucking program.

The House voted by voice vote to amend the Transportation-HUD 2008 appropriations bill by limiting funding for the pilot project. The amendment had bipartisan support, with sponsorship by Reps. Peter DeFazio, D-Ore., Nancy Boyda, D-Kan., Gary Miller, R-Calif., and Duncan Hunter, R-Calif.

“The Transportation Department needs to get it right before throwing open our borders to Mexican trucks,” Hoffa said. “The Bush administration has been too eager to endanger the driving public by rushing headlong into this risky pilot project.”

Several weeks ago, Congress approved provisions in the War Supplemental legislation that laid out specific safety requirements before Mexican trucks can travel beyond the border zone. Despite the law, the Transportation Department is moving forward with its plan to let potentially dangerous trucks travel freely on U.S. highways.

Among the reasons the Teamsters oppose the pilot program:

* There is no certified laboratory in Mexico that can test drug and alcohol samples;
* Mexico does not enforce hours-of-service regulations;
* The Mexican Commercial Drivers License (CDL) has questionable medical standards and no real assurance that the license is authentic; and
* State databases in the U.S. do not adequately track Mexican drivers’ history. For example, the Transportation Department Office of Inspector General has reported that more than 40,000 traffic violations by Mexican drivers hadn’t been entered into the State of Texas’ database.

The Senate has not passed its version of the appropriations bill.

Arkansas Best Corporation Announces Second Quarter Results

Arkansas Best Corporation today announced second quarter 2007 net income of $19.6 million, or $0.78 per diluted common share, compared to second quarter 2006 income from continuing operations of $29.0 million, or $1.13 per diluted common share. Arkansas Best's second quarter 2007 revenue was $458.2 million compared to second quarter 2006 revenue of $479.3 million.

ABF Freight System, Inc., the company's largest subsidiary, had second quarter 2007 revenue of $442.9 million, a per-day decrease of 5.1% from second quarter 2006. Second quarter 2007 operating income at ABF was $30.5 million compared to $46.4 million during the second quarter of 2006. ABF's second quarter 2007 operating ratio was 93.1% versus an operating ratio of 90.1% in the second quarter of 2006. "During this year's second quarter, ABF effectively managed through a challenging environment with a softer, more competitive marketplace," said Robert A. Davidson, Arkansas Best President and Chief Executive Officer.

ABF's second quarter 2007 total weight per day decreased by 6.9% versus last year. "Our year-over-year tonnage comparisons have not significantly changed since the fourth quarter of last year," said Mr. Davidson. "However, it's helpful to remember that during last year's second quarter, especially in June, ABF experienced significant increases in total business. In the current environment, ABF's continual focus on maintaining pricing discipline, controlling costs and adding value to customer relationships becomes even more important."

Total billed revenue per hundredweight was $25.53, an increase of 1.2% over last year's second quarter figure of $25.22. "The nominal yield increase was reduced by significant changes in freight mix and shipment profile," said Mr. Davidson. "As we have noted before, revenue per hundredweight is an imperfect measure of yield. Currently, we find that rates in our industry remain compensatory."

"We continue to be excited about our long-term prospects for profitable growth with our Regional Performance Model (RPM), which provides improved next-day and second-day services in the eastern two-thirds of the United States. Because ABF is still in the early stages of marketing RPM, the investment in these new services increased ABF's second quarter operating ratio by 1.3 percentage points," said Mr. Davidson. "ABF is making progress in the regional sector. In most cases, as in our traditional long-haul market, ABF is securing this business by meeting specific customer needs or by providing value in other ways, such as superior cargo care."

Throughout the quarter, ABF continued to excel in operational areas, including cargo care and safety and security, which translate into customer satisfaction and profitability. So far this year, ABF's cargo claim ratio, a measure of net cash payouts to revenue, is only 0.70%. Compared to previous full-year figures, this is ABF's best record in 24 years and the best in the nationwide LTL industry. Lower expenses associated with third-party casualty claims improved ABF's second quarter operating ratio by one half of a percentage point compared with the same period last year. As a percent of revenue, these second-quarter costs were the lowest in the last five years, when compared to both second-quarter and full-year figures. In May 2007, ABF was awarded the 2007 Excellence in Security Award from the American Trucking Associations (ATA) Security Council. In only the seventh year of this award's existence, ABF was recognized with this honor for an unprecedented fourth time. "These are real examples of how ABF distinguishes its services in the marketplace through its Quality Process, which has been active throughout the company since 1983," said Mr. Davidson. "Damage-free handling of freight cargo in a safe and secure environment is important to our customers. All of our employees take pride in producing the high standard that ABF maintains in these important areas of customer service."

Due to the current freight environment and because of delays in the timing of real estate opportunities throughout ABF's network, Arkansas Best now estimates that 2007 net capital expenditures will be approximately $95 million to $110 million. This is a reduction from the original $110 million to $135 million range that was provided at the beginning of the year.

Tuesday, July 24, 2007

UPS CFO: Co Confident In Inking Teamsters Pact By Year End

United Parcel Service Inc. (UPS) Chief Financial Officer Scott Davis said Tuesday the company remains confident that it can ink a new labor deal with the International Brotherhood of Teamsters by the end of 2007.

UPS executives, speaking during a conference call, said that pensions remain a "complex issue" in the talks, but said the Atlanta package-delivery company and its union are "working very hard on getting the contract done in 2007."

Contract talks with the Teamsters union began in the second quarter. The Teamsters represent nearly 250,000 workers at UPS, and the union is trying to organize more workers in the UPS Freight unit who were added when UPS acquired Overnite Corp. in August 2005.

In May, Teamsters President James Hoffa said the two sides were making " tremendous progress on negotiations," but the talks were temporarily recessed earlier in July, according to reports, due to the company's need for more information on pension funds that cover UPS workers.

Monday, July 23, 2007

UPS Expected To Report Steady 2Q Growth; Pricing An Issue

NEW YORK (AP)--United Parcel Service Inc. (UPS) reports earnings for the second quarter on Tuesday. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: UPS, the world's largest shipping carrier, first began as a messenger service in 1907. It had 2006 revenue of $42.6 billion and employs 407, 200 people worldwide.

In late May, UPS unveiled a fleet of 50 new hybrid electric delivery trucks aimed to reduce fuel costs and pollution.

Also during the quarter, the company continued to integrate its Menlo Worldwide Forwarding and Overnite acquisitions.

Contract negotiations began with the Teamsters union during the quarter. The current contract expires July 31.

BY THE NUMBERS: UPS expects a second-quarter profit of $1 to $1.05 per share, compared with earnings of 97 cents per share. Analysts expect profit of $1.03 per share, according to a poll by Thomson Financial.

ANALYST TAKE: Stifel Nicolaus analyst John Larkin said growth internationally, as well as in the supply chain and freight units, should add upside to the already improving domestic shipping business.

New technologies should help reduce labor costs, Larkin said, although the rollout of the company's Package Flow technology "was not as smooth as expected."

Additionally, the combination of less-than-truckload services along with parcel and express services could drive some incremental growth, the analyst said.

But a major theme for the second quarter will likely be competition, Larkin said, as the fight for market share grows more fierce in domestic ground shipping, and UPS seems to have settled for some less-attractive pricing to maintain its hold over chief competitor FedEx Corp. (FDX) and DHL.

Larkin rates UPS "Hold."

WHAT'S AHEAD: The Teamsters union contract seems unlikely to settle before the end of 2007, Larkin said, and may cause disruptions later in the year.

Acquisitions are likely on the "back burner" as the company focuses on the improvement of its supply chain solutions business, he added.

However, Larkin said the turnaround of the supply chain unit could provide some benefit to full-year earnings per share estimates.

Overall, the company's balance sheet remains strong, he added, which should lead to increased dividends, share repurchases, and possible acquisitions.

STOCK PERFORMANCE: Shares of UPS gained about 4% during the quarter ended June 29, and have decreased less than 1% this year. The shares recently traded at $ 75.04, up 3 cents.

FedEx Freight To Cut Fuel Surcharge By 25%

FedEx Freight, the regional less-than-truckload service of FedEx Corp., said Monday that it will cut its standard fuel surcharge by 25%, a move designed to boost revenue and ease volatility for customers as the weak housing and automotive markets slow the trucking business.

FedEx Freight President and Chief Executive Douglas G. Duncan said the company made the move as a response to customer feedback and as it works to improve its productivity, margins and fuel efficiency.

"We're in a position to do this, and it's the right thing to do to help our customers. And it gives us an advantage in the marketplace," Duncan said in an interview.

Less-than-truckload carriers consolidate freight for more than one customer in a single truck. FedEx Freight posted annual revenue of $4.5 billion in fiscal 2007, while FedEx Corp. posted $35.2 billion.

FedEx National LTL, the company's long-haul less-than-truckload unit, also will reduce its fuel surcharge to the same levels as FedEx Freight.

While the move involves FedEx Freight assuming more of the fuel cost, the hope is that additional volume will make up for "a great deal of that," Duncan said.

Duncan said the price cut is effective starting with Monday's shipments. He said FedEx Freight has been looking at cutting the fuel surcharge "for some time."

FedEx Freight and FedEx National update fuel surcharges weekly based on prices published by the U.S. Department of Energy.

Duncan said the idea is to ease the cost uncertainty for shippers who are dealing with ups and downs in fuel prices.

A spokesman for competitor United Parcel Service Inc., which also has less-than-truckload services, said the company had "nothing to say at this point" about the FedEx cut.

Duncan said he didn't know how competitors, which also include Con-way Inc. and YRC Worldwide Inc., would respond.

He said that while the weak housing market and a slowdown in the automotive industry have affected the trucking business, the company still predicts an uptick later this year.

"The broader economy still continues to be pretty solid," Duncan said.

FedEx shares were up 29 cents at $115.96 in recent trading.

UPS Freight Talks Move On To Economics

Union, Company to Resume Negotiations in Indianapolis

After reaching agreement in June on nearly a dozen additional articles relating to non-economic working conditions, UPS Freight talks resume the week of July 23 and economic issues are expected to be introduced at the table.

"We look forward to bringing the next phase of bargaining to Indianapolis. We are hopeful that our efforts bring us closer to achieving a contract for the 125 UPS Freight workers there," said Ken Hall, Director of the Teamsters Parcel and Small Package Division and co-chairman of the Teamsters' UPS Freight Negotiating Committee.

"It's been a lengthy process, but we have come to a tentative agreement on many articles dealing with the Indy group's working conditions, and now it's time to focus on wages, pension and health care benefits," said Gordon Sweeton, Assistant Director of the Teamsters National Freight Division who also serves as co-chairman of the committee.

The union intends for the Indianapolis agreement for the drivers and dockworkers represented by Local 135 to serve as a model contract, one that will answer the questions the remaining UPS Freight workers around the country have about joining the Teamsters.

"We know that UPS Freight workers across the country are following these talks with great interest, especially given the recent headlines made when UPS Freight sent letters to their workforce," Hall said. "The Teamsters are remaining focused on what we have to do: deliver a strong contract for Indianapolis that will demonstrate to the entire UPS Freight workforce what kinds of improvements can be made with a union."

Teamsters Negotiate Tentative Agreement for Newly Organized USF Reddaway Workers

Proposed Five-Year Contract Would Increase Wages, Improve Pensions

The Teamsters Union has won a tentative agreement covering newly organized USF Reddaway workers that will significantly improve their wages, pensions, health care and other benefits, Teamsters General President Jim Hoffa announced today.

"This is a strong first contract that will create an incentive for other USF Reddaway workers to join the Teamsters," Hoffa said. "There are about 2,000 unorganized drivers and dockworkers at Reddaway who are seeking a more secure future as well."

The tentative agreement covers about 425 workers who recently chose to join the Teamsters through card-check at seven former USF Bestway terminals in California, Arizona and New Mexico. USF Reddaway has since merged with USF Bestway.

The tentative, five-year agreement also would improve the workers' health and welfare benefits, eliminate a co-pay for health coverage, improve vacation time, provide a safety bonus incentive plan, and provide card-check recognition as spelled out in the union's National Master Freight Agreement.

"The tentative agreement signifies the strength of the Teamsters Union to negotiate strong collective bargaining agreements," said Tyson Johnson, Director of the Teamsters National Freight Division. "Since 1903 the Teamsters have been fighting to improve the working lives of men and women in North America. A Teamster contract is a boon to every family. We are proud to call employees of USF Reddaway part of the Teamster family."

The Teamsters represent about 1,600 workers at USF Reddaway. USF Reddaway, based in Clackamas, Oregon, serves 15 states and two western Canadian provinces.